ABSTRACT
Export credit and investment guarantee agencies (ECAs) are government-supported institutions that provide credit or guarantees to firms wishing to export goods or services, or who wish to conduct investment in foreign territories, and who cannot ordinarily obtain them through private institutions. These agencies were originally set up with two overriding goals. First, they were established in order to address failures in the market for trade-related finance. One must bear in mind that these agencies emerged in an economic context that was markedly different from the current one. To the extent that private banks and insurers at the time would not provide loans or guarantees for transactions in which political risk was perceived as too high, or too difficult to estimate, and where prospects of recovery in case of default were either null or dependent on the home state's willingness to espouse private claims through the unwieldy mechanism of diplomatic protection, states found it in their interest to provide export credit and investment guarantee services for those transactions that would not be insured by the private sector. Changing conditions in global economic governance — in particular the strengthening of trade and investment regimes and increased access to private arbitration since the 1980s — greatly improved the position of firms operating on the global markets, and this development could be expected to drive state-supported export credit to an ever more marginal role. To understand why this has not been the case, it is important to note that ECAs have a secondary goal, which is to insulate home-state industries against external risks, such as competitive subsidization of competing foreign firms by their home states, or unexpected contractions of finance in the private market caused, inter alia, by financial crises such as that experienced in the core northern economies since 2008.
